Industry Activities
Succession is a Process but an Outcome
SRC GM Henry Chang Anticipates to Broaden Service Range of the Group
by Tanya Shih, Fastener World Inc.
Special Rivets Corp. (SRC), established in 1983 and headquartered in Taiwan, has 54,000 sqm modern manufacturing facilities respectively in Shanghai and Zhejiang (China). It has introduced sets of equipment from Italy and Taiwan as well as two sets of computerized automated storage systems to manage 50,000 storage units. Every month it can produce more than 0.5 billion pcs of rivets in a variety of materials and 0.2 million units of specialty riveting tools, which are exported to main fastener distributors, well-known hardware wholesalers and other leading brands in more than 100 countries.
“When SRC was established, I was only 3-year-old. Succession is a natural process to me.”
“Quality” and “Service” are both what the Group is concerned about. The management in Taiwan is in charge of order and sales, while Songjiang factory in Shanghai and Jiashan factory in Zhejiang are responsible for production and shipment. General manager Chang said, “Rivets are well-developed industrial products though in most cases for basic applications. Innovation generally is not what manufacturers are expected to strive for. Seriously, SRC did this before, but the acceptance in the market was not high.”
“After then, we focused on R&D of rivet molds and hand/pneumatic tools. One was for accelerating production efficiency and promoting product quality, and the other was for catering to customers’ inclinations in purchasing to realize the aim of one-stop shopping,” he added. Both approaches were finally proved to be true. Products of SRC altogether share quite high percentages of the market share and its annual sales taking the lion’s share always leave other competitors behind.
Recalling his childhood, General manager Chang said, “Let’s just think of this. I was only at the age of 3 when SRC was founded. I grew up with this company and had to watch if those machines functioned normally on weekends when I had no school to go. I guess some other 2nd generations in the industry also had the same experience as mine.” “Did I ever think of getting away from this or was I ever enticed by the outside world? Well, succession is just a process that naturally happens to me. Of course, we did profit from this,” he noted.
“Lacking social experience I was once fooled by my employee when entering the management in 2007.”
General manager Chang said, “I think staff, equipment and materials are the most important key points for quality. I started to assist the Group’s operation in 2007 and the factory in China is where I started to do this.” He added, “The factory in China is responsible for production, and therefore, how to communicate with suppliers, getting reasonable prices, hiring and managing staff are the key aspects President Chang would like me to handle on.”
After China started to promote capital economy and encourage foreign companies to set up factories, relevant regulations for labor force also gradually became stricter than before. Chang said, “In 2000, SRC set up China’s largest rivet factory in Shanghai and the NTD15 million worth of investment made it gain lots of favorable treatments from Shanghai City Government. As a result, it drew many job applicants to the company.” He added, “Managing employees is difficult, so there must be a good way to communicate with employees. In addition to recruitment, keeping the existing staff is also very difficult. I remember I was once fooled by my Chinese staff. I was so naïve at that time and even reported to President Chang and told him “This employee is such a poor guy with bad family circumstances and financial troubles. Can we help him out?” Well, I was really naïve...”
Succession is a Process But an Outcome
Henry Chang majored in Business Management, his younger sister majored in finance & accounting, and his younger brother majored in industrial engineering. In other words, the Chang brothers and sister altogether can manage the company, control the finance, and get involved in production. General manager Chang doesn’t think succession necessarily means passing heritage to just one person, as in many times it may be more proper to call this process “handover of experience.”
Looking at questions in his hands, Chang said, “I think, succession is a process but an outcome and this process may last 10-15 years.” He then explained with his own experience, “Every company needs a powerful leader and that is the current role of President Chang. The management system will not change even I’m in. Assistance and learning will be my most important missions in the process of succession.” General manager Chang then said, “If only the complete transition of control over the company or the power to decide can be considered real succession, then most of the current companies have not yet reached the criteria. Take Wang Yung-ching, the founder of Formosa Plastics Group, as an example, he controlled the group until he passed away. So, unless the 1st generation does not want to control, the 1st generation leading the 2nd generation is more common in the process of succession.”
He said, “Last year we saw short supply of aluminum wire. President Chang then asked me to deal with this problem. Then I flew to Osaka (Japan) to purchase 400 tons of aluminum wire whose price was three times that of Chinese suppliers. However, in order to make our supply run smoothly, we had to accept it. What surprised me during the price negotiation was that the 50-year-old general manager of an Osaka-based wire plant told in front of me that he needed to double-check the price with his father, who was nearly 90-year-old.”
What if opinions differ? Chang replied, “When a decision needs to be made, President Chang’s decision will be the top priority and mine will be the 2nd option. The most important thing is, we never make two different decisions on one issue, as that will make staff confused. Moreover, before the decision is made, I will definitely discuss with President Chang.”
SRC’s Outlook
General manager Chang thinks that complete succession is to maintain the corporate scale and profitability. To do so, he also set a goal: “When the balance between dominance and assistance is gradually adjusted, I hope that I can also have the ability to bear the responsibility for success or loss when I am authorized to control more. This is the tacit understanding between President Chang and I. I also need to build up my leadership. I think factories should also provide service and understand customers’ requests, so visiting customers is on my current schedule. Second, passing the audit of TS 16949 will be also the next key point of the company to increase the competitive edge after the construction of the in-house waste water treatment system is finished.”
Chang talked about the future of SRC, “Being traded publicly won’t be our goal. SRC is a company with profit and we profit not only through our main business. For other companies with sufficient capital, SRC is attractive to them, so acquiring SRC may be also a good way to do. People should know that being acquired does not mean being forced out of the company but being hired with expertise in the industry.” Moreover, “Shanghai City Government intends to expand the scale of the 2nd most populous area in the Great Shanghai City and has started to encourage companies to relocate in return for compensations. So, we have gradually reduced the production activities in Songjiang factory. This is good news for us, as it gives us an opportunity to integrate the resources of our two factories in China and can thus get the compensations.” Chang even said, “I always would like to do something that is not relevant to our current business, for example, hotels.”
The development of SRC can be traced back to many year ago when President Chang saw an ad of an Australian rivet supplier who was looking for a representative in Taichung. Now with the joining of the 2nd generation, we see unlimited possibilities for SRC group.
